U.S. vehicle fuel economy hits record 24.7 mpg, EPA says

WASHINGTON -- The fuel economy of new U.S. cars and trucks hit a record 24.7 miles per gallon in the 2016 model year, a government report said, even as regulators consider whether to revise fuel efficiency requirements.

Fuel economy rose by just 0.1 mile per gallon in 2016 and was projected in the 2017 model year to hit another record of 25.2 mpg, the U.S. Environmental Protection Agency said in a report.

Regulators have been considering whether to revise fuel efficiency requirements. Last March, President Donald Trump ordered a review of tough U.S. vehicle fuel-efficiency standards put in place by the Obama administration, but states like California have pushed back against this decision.

Low oil prices have encouraged Americans to shift away from smaller passenger cars to trucks and SUVs. This has led automakers to worry that rising fuel efficiency requirements through 2025 may be too stringent, but environmentalists say automakers must make vehicles more efficient.

Dan Becker, director of the Safe Climate Campaign, said in a statement that the 2016 fuel economy improvement fell well short of the 1 mile per gallon that the Obama-era rules called for.

The automakers "have the technology to improve mileage," Becker said. "The standards need to be strengthened, not weakened."

Another top advocacy group said the improved fuel economy figures show government standards work.

“Fuel economy standards are working and consumers are better off as a result. Vehicles continue to hit record highs in fuel efficiency, while the biggest improvements are from cross-overs, which continue to gain an increasing share of the market,” David Friedman, director of cars and product policy and analysis for Consumers Union, the policy and mobilization division of Consumer Reports, said in a statement.

"Automaker innovations are saving consumers money at the pump in everything from compact cars to pickups and SUVs."

Running surpluses

The report said that after running surpluses in meeting greenhouse gas emission limits, automakers ran a 9 gram per mile deficit. The EPA said all major automakers still comply with the standards, with some using credits banked from prior years to meet the requirements.

Two automakers -- Volvo and Jaguar Land Rover -- have emission deficits, but they have three years to come into compliance. Neither automaker responded to a request for comment.

Fiat Chrysler Automobiles had the biggest deficit, falling 28 grams per mile short. But the company had credits banked to meet the requirements.

The company purchased nearly 2.5 million megagrams of emissions credits in 2016 from Tesla Inc., the EPA said. A megagram is equal to 1,000 kilograms and is calculated on emissions saved over legal requirements.

The government does not disclose how much automakers pay for credits. Since 2010, FCA has purchased 22 million megagrams of credits from other automakers, including nearly 6 million from Tesla.

Company results

Mazda Motor Corp. led the industry in average fuel economy at 29.6 mpg in 2016, but Honda Motor Co. is projected to surpass Mazda as the leader in 2017.

"We are confident that our future engineering developments on internal combustion engines... will reinforce our leadership position as the fuel economy champion," Mazda said in a statement.

Detroit's Big Three automakers -- including General Motors Co and Ford Motor Co -- had the least fuel-efficient fleets overall. They sell a larger share than their foreign rivals do of pickup trucks and SUVs, which generate much larger profit margins than passenger cars.

A GM spokesman said that despite the market shift away from passenger cars, the company's fuel economy was improving, in part because of rising miles per gallon among trucks and SUVs, coupled with sales of electric vehicles.

According to the EPA, GM's fuel economy rose to 23 miles per gallon in 2017, from 22.4 miles in 2016 and 22.2 in 2015.

FCA technically had the worst record, but the EPA said data for that automaker and Volkswagen AG were preliminary pending completion of investigations and corrective actions.

The U.S. government filed a civil lawsuit last May accusing FCA of illegally using software to bypass emission controls in 104,000 diesel vehicles sold since 2014.

VW has struggled to draw a line under its diesel emissions test cheating scandal, which broke in the United States in 2015 and which has cost the automaker as much as $30 billion.

The EPA report measures real world fuel economy, which is less than the values listed on new vehicle window stickers.